Arun Jaitley hints at not raising tax rates, sops for manufacturing

Davos: Finance Minister Arun Jaitley on Friday hinted at not raising tax rates and providing incentives for manufacturing in the coming Budget while asserting that "structural changes" will have to be made to get the economy to 8-9 percent growth.

Hard selling India to global investors at the World Economic Forum here, he also promised a stable tax regime that will not come up with unreasonable demand and change taxes retrospectively.

"In terms of incentivising manufacturing, it is very much on our agenda. Even though we had few days during the last Budget we did give to Ministry of Micro Small and Medium Enterprises (MSME), National Investment and Manufacturing zone(NIMZ) and so on because we wanted the sector to pick up and that priority is fairly high on our agenda," he said speaking at a session on 'India's Next Decade'.

While referring to various revenue sources for the government including divestment, dividend and spectrum sale, the Finance Minister said as economic activity picks up, the government's capacity to raise revenue will also increase.

"I am not in favour of raising the rates of taxation as that could become counter-productive," he told reporters late last night.

Jaitley expressed confidence that India was close to the point when investment will pick up as there are a large number of investors who are waiting to come in.

"They only want to be doubly sure about the credibility of the decision making process and the stability of the policies," he said.